Given this importance, we want to help you ensure that your profit margin stays right where you want it – jumping through the roof.

Every piece of advice below won’t apply to every rental property owner. Some might only apply in some markets or to certain types of rentals. However, if you sift through these tips we are sure you will find a nugget here or there that will help you improve your rental property’s cash flow.

As you read, please remember, some ROI can’t easily be calculated. Can you really put a value on better tenants? Can you put a price on fewer repairs?

Maybe. But we can hardly do that for you, so all of our calculations below are based on somewhat tangible numbers. However, we encourage you to think about how some of these tips can help you achieve greater cash flow, albeit indirectly.

Knowing how to increase your cashflow is great, but don't make the 10 worst cashflow mistakes imaginable. Hit the download eBook button to get the 51 tips in this blog, plus the 10 worst cashflow tips imaginable. You also get a cheat sheet with all 51 cash flow tips. This cheat sheet has the cost to implement the tip, the estimated monthly rent increase, and the estimated 4-Year ROI. Get your copy now!Download Ebook

1) Require an Application Fee

Running background checks can become expensive, but you don’t have to pay for it yourself. We charge an application fee to help cover the cost of background checks, and we suggest you do the same.

4-Year ROI = $200 to $300

2) Landscape the Property Before Showings

No one wants to live in a house with an overgrown yard (or no yard at all). I know, I know, if the yard is a little overgrown they can just mow it, but remember – people lose their imagination after the age of 10.

Don’t ask them to imagine how great the yard would be if it were mowed and had a flowerbed. Take care of that before the showing. For example, we took over management for a rental property in Chandler at one point that really needed some TLC. We saw many more applicants once that issue was resolved.

4-Year ROI = $80 to $320

This would be a totally different home without nice landscaping.

3) Install New Interior Doors

If your interior doors look old enough to fold under the karate kick of a four year old, you probably want to replace them.

4-Year ROI = $130 to $370

4) Change the Light Fixtures

Lights can tie a room together. Or they can make you feel like you’re in a time warp. Ask yourself, do the light fixtures in your rental feel like they are from 20-30 years ago? If so, then they probably need replaced.

4-Year ROI = $130 to $370

5) Install New Kitchen Cabinets

This is definitely a huge task, and not always necessary (see #24), but it will definitely help when your current cabinets are in disrepair. People love kitchens, and cabinets make up a large portion of your kitchen. With these two thoughts in mind, you can see why new cabinets might be necessary. Furthermore, while they have a low 4-Year ROI, they will continue to give you a return for many years to come.

4-Year ROI = -$80 to $400

6) Leasing Fee for Additional Occupants

You need to reconcile the situation when one person signs a lease and you suddenly have two or three people living in the property. They’ve broken your lease and now you have no idea who is living in your rental.

You need to run a background check on new tenants, update the lease, and charge a new leasing fee. You are fully justified to charge an extra fee given that this costs you time and money.

4-Year ROI = $300 to $400 (if charged once in 4 years)

Advice from a Pro Investor

Offer new tenants a multi-year lease with a built-in rent increase on years 2, 3, etc. That way the tenant knows in advance exactly what to expect in the future. This removes the anxiety of rent increases and locks in a longer leases.

Marco Santarelli of Norada Real Estate Investments

7) Replace/Paint the Mailbox

How important is a mailbox to living in a home? Not very, but if a tenant pulls up to a house with an old, beat-up mailbox there is a chance that they will get a bad first impression.

Turn that negative first impression into a positive one by putting up a stylish or well-painted mailbox. A quick shopping search on Google for “stylish mailbox” will present you with a variety of great choices under $50. As you can see below, the right mailbox can make the right impression.

4-Year ROI = $190 to $430

VS

8) Replace the Shower Head

When you marry the low cost of replacing an old, beat-up showerhead with the love tenants have for bathrooms, you end up getting a great return-on-investment.

4-Year ROI = $200 to $430

9) Add New Doorknobs

New doorknobs can add a nice touch, and if you find the right ones they can be very stylish. This addition doesn't cost much, but tenants love the way they look, which helps you earn a decent ROI.

4-Year ROI = $200 to $440

10) Replace an Old Dishwasher

Old dishwashers don’t efficiently clean, which forces tenants to rewash dishes by hand. To some people, the idea of hand washing dishes is as foreign as using spider webs as Christmas decorations (if you’re from Ukraine this may not be so foreign).

So give the people what they need! Used dishwashers in working condition can be picked up for as low as $150, which will allow you to easily make back the money spent.

4-Year ROI = $280 to $520

11) Install New Blinds

Blinds that look super trendy can help draw the right kind of tenant, hide bad windows, and increase your monthly rent. Or you can just buy the $10 blinds that everyone else has. We get it, if you buy the cheaper blinds you save money. But don’t forget that buying the cheap blinds could cost you money in the long run.

4-Year ROI = $65 to $545

12) Install a New Toilet

You need to buy a new toilet if you currently have a toilet that looks old, has stains, and is constantly in need of repairs and tweaking. The old toilet is a turn-off to tenants and will waste your time and money.

4-Year ROI = $305 to $545

Advice from a Pro Investor

Whenever I acquire a new rental property in my local market, the first improvements I look at making are in the kitchens and bathrooms. Particularly, my goal is to replace any water-consuming fixtures like toilets, faucets, shower heads that are more than 20 years old.

These improvements are important for my rental units because water is the only utility I am responsible for paying as a landlord (this is primarily because of how the city water utility system works in my area). Since this cost is automatically built into my ownership of each property, it's important to reduce this cost while also improving my tenant's experience at the same time.

By replacing these older toilets, faucets and shower heads, we're able to cut each property's water consumption substantially - simply by using newer technology designed to use a more appropriate amount of water. The nice part about this cost savings is that my tenants get a better living space and in time, the improvements pay for themselves!

Seth Williams, REtipster.com

13) Paint your Front Door

The value of a thing is not in the cost it takes to make it, but in the subjective value afforded it by the customer. This is best illustrated in the case of the front door.

While it costs only $100 to $200 to paint, tenants will be willing to pay far more in the long run. This design choice will have a strong, immediate effect as tenants observe the property for the first time. Ultimately, this will encourage them to pay more rent.

4-Year ROI = $330 to $570

Bonus points if you can match your door with shutters like this.

14) Replace the Kitchen Sink

You need to replace your kitchen sink if it is outdated or in disrepair. The kitchen is one of your tenants’ favorite rooms in a rental and if the sink is not up to par they will definitely notice. So get it replaced if knobs don’t turn correctly or if any part is loose or functioning insufficiently.

4-Year ROI = $330 to $570

15) Install a New Range Hood

Not only do range hoods look super nice, but they also reduce moisture. This will help you save on a variety of maintenance issues in the future.

4-Year ROI = $330 to $570

16) Install New Bathroom Lighting

We’ll say it again – tenants love nice bathrooms. Old bathroom lighting simply won’t help you capture the highest rent possible, so replace old lighting with new, up-to-date fixtures. It isn’t too expensive and you will definitely make your money back.

4-Year ROI = $380 to $620

Great lighting simply makes for a better bathroom.

17) Pressure Wash Outside

If you don’t own a power washer you can rent one for around $25. This will enable you to wash mold or mildew off a deck, driveway, or exterior walls. This cleaning will help you get better tenants for a higher rental price. Moreover, it will offer the additional benefit of property maintenance.

4-Year ROI = $380 to $620

18) Add New Street Address Numbers

Buy modern street address numbers and put them on your rental. Seriously, the curb appeal is out of this world and it can can cost as little as $60.

4-Year ROI = $400 to $640

19) Install a New Vanity in the Bathroom

Brushing their teeth, cleaning their faces, washing their hands – all of these activities, and more, take place at the vanity. Because so much time is spent at the vanity, you will want to take special care to keep it in good shape. When your vanity becomes old and broken, as it surely will, replace it with a new one.

4-Year ROI = $470 to $710

20) Charge Late Rent Fees When Appropriate

If you don’t hold your tenants accountable for late fees, it is time to get a business mindset. These tenants are not taking you or your property seriously and it is hurting your investment. Plus, if it is in the lease agreement, and it should be, they are unlikely to complain. This is especially important if you are in a market where it is difficult to profit. This could include markets that simply have low margins or markets that impose rent control. In these situations, appropriate late rent fees could help keep you a float.

4-Year ROI = $480 to $960

21) Replace Old Kitchen/Living Room Flooring with Tile

Whether you have vinyl or laminate flooring, you can be sure it will crack and scratch over time. While it might be easy to overlook this because it doesn’t affect the functionality of a property, it would be a mistake to ignore. Get it fixed and improve the properties value. Plus, tile lasts forever.

4-Year ROI = $420 to $1,140

22) Replace Carpet with Tile

Carpet kills cash flow for two reasons. One, tenants don’t usually like carpet. Two, it fades and you have to replace it. Upgrade to more durable tile and improve your cash flow over time.

4-Year ROI = $420 to $1,140

23) Add Additional Parking

When you don’t offer parking you make people drive around looking for a spot. While this isn’t inherently bad, you do want to serve your tenants’ needs. Parking can do just that – even if it is a section of gravel.

4-Year ROI = $1,000 to $1,200

Advice from a Pro Investor

I have been very successful renting out space on my properties to other companies, like ZipCar - who has paid me over $200/month for a parking spot I have provided them.

Lucas Hall, Landlordology.com

24) Paint Kitchen Cabinets

While replacing your cabinets is an option, the time to get a return is lengthy. The preferred choice, if you can, is to paint your cabinets.

A fresh coat of paint or stain can make your cabinets look new and, with the right color, you can really make the cabinets stand out as a centerpiece in the kitchen.

4-Year ROI = $1,000 to $1,240

Choosing the right, bright color can really make them pop.

25) Add a New Coat of Paint Yourself

Paint is one of the most inexpensive ways to improve a property. Over time tenants damage walls. This is usually normal wear and tear, but after 2-3 years your walls will begin to look dated. A fresh coat of paint will be an easy fix that offers a great ROI. Plus, because most people can paint, you should be able to keep costs low by doing this yourself.

4-Year ROI = $885 to $1,365

Advice from a Pro Investor

I keep my walls colors neutral, but not stark white. Stark white walls are too cold and institutional. I have found neutral, off-white, or light beige is enough color to make people see the property more as a home than a rental unit.

Cody Sperber, Clever Investor

26) Add Storage Units (Multi-Family)

If you are renting residential homes this won’t be very useful to you. However, if you are the owner of multifamily units this could become quite lucrative.

Apartments are a prime example of limited storage space. You can start by putting one or two storage units on the property and see if people need them – and some will.

People love their things and everyone has hoarder tendencies. By adding storage, you can help tenants save space while increasing your cash flow.

4-Year ROI = $1,200 to $1,375

27) Replace Old Kitchen/Living Room Flooring with Laminate Wood

Floors can make or break a room, and if your flooring looks beat-up and worn-out it is time to make some repairs. One option is to use laminate wood, which is very popular in many areas of the country.

4-Year ROI = $700 to $1,400

28) Replace Old Carpet with Laminate Wood

While the ROI for this repair is the same as #27, there are several key differences in how this affects your success.

First, people tend to prefer laminate over carpet. In fact, many tenants don’t like the idea of living with a carpet used by someone else because of its ability to capture dust, dirt, and other particles.

Second, laminate will be much more durable than carpet. While carpet needs to be replaced about every other tenant, laminate can last a bit longer. So while the cost to implement is higher, it will save you money on repairs.

4-Year ROI = $700 to $1,400

29) Upgrade with a Nice, Used Fridge

A decent used fridge can be found online for very little, and the upgrade can have a fantastic effect on your monthly rent. We recently found a nice stainless steel fridge on Craigslist for $300. The owner wanted to get rid of it because his family wanted to get a fridge with French doors. What a steal!

4-Year ROI = $1,140 to $1,620

30) Install a Washer and Dryer

Remember Pig-Pen from Peanuts? We guarantee some tenants would look like that if they didn’t have a place with laundry in the unit. People simply hate going to Laundromats. It’s just too much work.

As a result, they will almost always be willing to pay extra money every month for the convenience of a washer and dryer. While rare, you can find both used for as low as $400 dollars. This will easily give you higher rents and a greater ROI in the long run.

4-Year ROI = $1,560 to $1,800

31) Offer Landscaping Services

While tenants in single-family homes are typically responsible for landscaping, you can offer landscaping as a service for an additional fee.

You can easily make 30-40 a month on landscaping fees. Moreover, you can sleep well knowing that your property is being professionally maintained, which preserves it better over the years.

4-Year ROI = $1,440 to $1,920

32) Offer Pool Cleaning Services

This is similar to offering landscaping as a service, but in this case the preservation of your property is an even greater benefit. If tenants don’t take good care of a pool the repairs can become incredibly costly to you.

4-Year ROI = $1,440 to $1,920

33) Collect Holding Fees

Ask for a holding fee when a tenant applies. If they fail the background test or you turn them down for another tenant, then you should give it back to them. If they live in the property, add it to their move-in costs.

However, if they decide to live somewhere else you can keep the fee. This will guarantee that you don’t waste your time if a tenant selects a different rental. The one caveat to this tip is that you should first check and make sure that it is legal in your local market. Some local and state laws may prohibit this practice.

4-Year ROI = $1,000 to $2,000

34) Increase Rent

We don’t suggest arbitrarily raising the rent just to make more money. However, if you haven’t raised your rents in awhile you might be below market value.

If you can, find out the rent for similar properties in your area. If you are in the Maricopa County, we would love to give you a free cash flow report, which details the current state of the market and the optimal rent for your property.

4-Year ROI = $2,400 to $3,360

35) Make the Property Pet Friendly – but Add Pet Rent

If you aren’t going to charge pet rent, don’t let pets into the house. They place heavy wear and tear on the property and your rental will require a heavy cleaning after the tenant leaves.

However, you can charge an extra $25 or more a month per pet. It is a widely accepted practice and it will definitely help improve your cash flow.

4-Year ROI = $1,200 to $3,600 (per unit)

You wouldn't leave this puppy behind over a monthly fee, and neither will your tenants.

36) Stick to Your Lease Termination Clause

You can’t just let tenants come and go as they please. Sure, it’s great when a tenant gets a new job in another state or buys a house, but you shouldn’t let it ruin your cash flow. They signed a lease and they need to be responsible for that decision.

At Active Renter we keep things simple by charging for “liquidated damages,” which accounts for vacancy costs, marketing costs, cleaning costs, etc. To account for this loss we charge 3 months worth of rent and we put this in the lease agreement.

4-Year ROI = $2,000 to $4,000

37) Rent out Furnished Property

Typically we don’t advise that investors rent out furnished property. The one caveat, however, is that a furnished property can work in your favor with student populations.

If you are located in a college town you will certainly be more effective with a furnished property. Seriously, what college kid is going to spend the money to buy couches, a bed, and a coffee table when they can find a furnished pad elsewhere? br>4-Year ROI = $2,550 to $4,950

38) Split One Bedroom into Two

Large rooms can have a new wall added in order to create a new room. While this might be costly at the start, a new room can add quite a bit to the monthly rent. However, keep in mind that you need to stay up to code. In most areas this means that a bedroom must have a closet and a secondary exit (usually a window).

4-Year ROI = $15,055 to $19,855

39) Add Vending Machines (Multifamily)

Vending machines are temperamental, but if you play your cards right you can make a lot more income. So how can you successfully implement a vending machine program? It’s all about the products in the machine.

If you put in soda, you can expect to do okay, but if you put in home products like canned goods, toothbrushes, and Tylenol you can make a killing. Remember, if it is an essential and your tenants would have to drive to buy it, they would rather buy it from you.

4-Year ROI = $1,400 to $47,000

40) Add Coin-Laundry (Multifamily)

So how successful can you be with coin laundry? Let’s do some math based on a hypothetical multifamily property that we’ll call “Sappy Pines Apartments.” Sappy Pines has 30 residents who value clean clothes. They also know that you shouldn’t mix whites with darks, which means they wash two loads a week.

Math: $4/Load x 2 Loads/Week x 30 People x 4 Weeks = $960/Month

$960/Month x 48 months = $46,080

So you make $46,080 in 4 years right? We wish, but unfortunately no. After factoring in $150 a month in utilities and the $2,000 (used to buy two washers and two dryers) you make $36,880.

If your tenants were to wash 3 loads a week, it would end up being $59,920. Even taking repairs and unseen costs into consideration, this is still a great way to earn additional passive income. Plus, you save your tenants a trip to the laundromat!

4-Year ROI = $36,880 to $59,920

41) Add Valet Trash (Multifamily)

This is a useful amenity for several reasons.

One, you can contract the work out and add it in as a fee for residents.

Two, it helps to ensure that waste isn’t sitting around and attracting pests.

Three, it increases tenant retention because tenants really like the extra service – especially those who live far from the dumpster.

The quick math? At $15/month for 20 doors, you can earn $36,880 and at 100 doors it is $59,920. Valet waste companies charge you $15 a door, so you’ll need to charge $30 to tenants.

4-Year ROI = $14,400 to $72,000

Tips for Better Business Management

So far you have read about tips that directly increase your cash flow. For those tips, we could estimate the cost to implement and the approximate return on investment. With these numbers we could pretty easily estimate a net 4-year ROI.

Next, you will read business management tips, which will help you optimize your cash flow. Their return is more difficult to calculate, but we would bet that implementing these tips will help you become more successful as an investor.

42) Don’t Hold Property Showings

Currently there are several lockbox options on the market that allow potential tenants to take a self-guided tour of your property. This process uses credit card verification to allow them into the property with minimal risk. This is incredibly helpful because it allows more showings to take place, which makes your property easier to rent. Plus, you don’t have to drive out to the property all the time to conduct showings.

We have found that this reduces the length of vacancy, which in turn helps to increase your number of collected rents. Each lockbox costs $30 a month, and if you can rent your property even a week or two faster this becomes an investment that is well worth it.

43) Schedule Showings for the Same Time

Okay, so we just suggested not hosting showings. The alternative is to schedule showings for the same time. This will make potential tenants highly aware of the competition for the property.

This could result in higher bids for the property and lower vacancy rates. Again, this will also help you save time that would otherwise be spent driving to the property and leading showings.

44) Decrease Your Rent

How could decreasing your rent increase your cash flow? If you are trying to get rents that are higher than market value, then you are likely to sit on the market.

Even a few extra weeks on market will result in a loss for most investors. So decrease your rents if they are above market value and watch your vacancy rate decrease as well.

45) Clean the Unit for Showings

It’s really difficult for tenants to imagine themselves in a cluttered or dirty rental unit. So help potential tenants see the value of your rental by cleaning really well before showings. It will take $10 plus a few hours of your time and this extra effort can easily reduce your vacancy rates.

Declutter and Clean Up for a Higher ROI.

46) Lightly Stage the Property Before Showings

Staging has been shown to effectively sell and rent properties, but you don't need to fully stage your property. For many of our properties we do light staging. This includes minor details like putting flowers on the kitchen table and hanging towels in the bathroom. A light staging can be done easily and for a very low cost. So get creative! Figure out how you can give your property some personality before tenants take their tours.

47) Look Professional for Showings

Trust us, we get it, you just finished repairing some plumbing over at your other rental and you needed to rush to a showing. But what do you think those potential tenants think of the person who just showed up in a dirty work shirt?

Tenants don't just get a property when they sign a lease – they get a landlord too. So put forth the extra effort to make sure you’re the landlord they want.

48) Be Nice During Showings

We really think you should be nice all the time, because it’s just the right thing to do, but definitely be nice during showings. For potential tenants this is a customer service experience, and it can definitely help you win their business. Ultimately, this can save you from sitting on the market longer than you need to.

49) Successfully Market Your Property

At a minimum, you should be getting your property up on listing sites like Zillow, Hotpads, Radpad, Zumper, and Craigslist. If you don’t have a web presence you are going to struggle with filling your property quickly. By putting more effort into marketing you are certain to reduce days on market.

50) Hire an Accountant

This may not apply to everyone, some of you reading this may even be accountants, but if you hear the word “tax return” and feel an overwhelming terror, this is for you.

A good accountant can save you money on tax returns and they can also set up a depreciation schedule

51) Repair – Don’t Replace

So we definitely can’t put a price on this tip, but if you keep this mindset you are guaranteed to save money. For example, imagine that your sink isn’t working properly. Do you immediately replace it? Of course not! Try to identify the problem and repair it first. The caveat to this, of course, is that repairs need to be completed well. And no, “throwing some duct tape on it” does not constitute a sufficient repair.

Improving Your Real Estate Investments

As you read through these tips, we hope you were able to identify the most important tips for your property. If you can take the time to successfully implement those tips, you will see your investment earn greater returns. If you need advice for your rental property, give us a call, we're the Phoenix property management company that knows investors and their investments. Whether you own 1 or 100 properties, we can help you take your returns to the next level.

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ARPM is focused on helping investors acquire and manage rental properties while providing tenants with the best rental experience. We have been a leader in the residential property management industry for many years by assisting people with growing their portfolios, and keeping their existing rentals profitable.